GAUSS code for reproducing empirical results of 

``Why has the U.S. economy stagnated since the Great Recession?"

by Yunjong Eo and James Morley, Review of Economics and Statistics, forthcoming

This version: September 27, 2021.
Note: In the revised version, we added the labelling restriction for the L-shaped contractionary regime (i.e., mu2 <0).

Please contact Yunjong Eo (yunjongeo@korea.ac.kr) if you have any questions about the code.

(1) Download data and code in a desired folder.

data: rgdp2018q4.txt (U.S. real GDP and NBER recession dates for 1947Q1-2018Q4 from FRED)
code: Eo_Morley.g

(2) Run Eo_Morley_MSM.g

The code reproduces estimates for the benchmark Markov-switching model presented in Section 4 and can be adapted to consider robustness exercises in Section 5.

The model was estimated with GAUSS13.


